-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MHFRTTrLi3n4GIF7Iro7fsOD/8hShKCJBDRUojf3IYuJwEGgHzcBhinRcOMq2zgD M+vbldOKHdQ88hc5h3sCJA== 0001017062-99-000973.txt : 19990518 0001017062-99-000973.hdr.sgml : 19990518 ACCESSION NUMBER: 0001017062-99-000973 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990302 ITEM INFORMATION: FILED AS OF DATE: 19990517 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MC INFORMATICS INC CENTRAL INDEX KEY: 0001023767 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 943165144 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: SEC FILE NUMBER: 000-21819 FILM NUMBER: 99626253 BUSINESS ADDRESS: STREET 1: 18881 VON KARMAN AVENUE STREET 2: SUITE 100 CITY: IRVINE STATE: CA ZIP: 92612 BUSINESS PHONE: 9492617100 MAIL ADDRESS: STREET 1: 18881 VON KARMAN AVENUE STREET 2: SUITE 100 CITY: IRVINE STATE: CA ZIP: 92612 FORMER COMPANY: FORMER CONFORMED NAME: HEALTHDESK CORP DATE OF NAME CHANGE: 19961015 8-K/A 1 FORM 8-K/A DATED MARCH 2, 1999 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------------------- FORM 8-K/A CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): March 2, 1999 --------------------------- MC INFORMATICS, INC. (Exact name of registrant as specified in its charter) California 0-21819 94-3165144 (State or other jurisdiction of (Commission File Number) (I.R.S. Employer) incorporation or organization) Identification No.) 18881 Von Karman Avenue, Suite 100 Irvine, California 92612 (Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (949) 261-7100 Item 7. Financial Statements and Exhibits. (a) Financial statements of business acquired. The required financial statements of the business acquired are filed with this report as pages F-1 through F-14 following the signature page. 1 (b) Pro forma financial information. The required pro forma financial information of the business acquired is set forth below. The accompanying pro forma condensed statements of operations illustrate the effect of the merger with MCIF on the Company's results of operations. The pro forma condensed statements of operations for the year ended December 31, 1998 and the three months ended March 31, 1999 are based on historical statements of operations of the Company and MCIF for those periods. The pro forma condensed statements of operations assume the merger took place on January 1, 1998 and 1999. The pro forma condensed statements of operations are not intended to be indicative of the results of operations which actually would have been realized had the merger occurred at the times assumed, nor of the future results of operations of the combined entities. The accompanying pro forma condensed statements of operations should be read in connection with the historical financial statements and notes of the Company and MCIF. PRO FORMA CONDENSED STATEMENT OF OPERATIONS (Unaudited) Year Ended December 31, 1998
The Company MCIF Pro Forma Pro Forma (Formerly, Adjustments Combined HealthDesk Corporation) --------------------------------------------------------------- Revenues $ - $3,716,585 $ 3,716,585 Direct Expenses - 2,529,959 2,529,959 ----------------------------- ----------- Gross Profit 1,186,626 1,186,626 Operating Expenses Selling, General & Administrative (382,008) (1,309,601) (1,691,609) Amortization of Goodwill 685,200(1) (685,200) Other income (expense): Interest Income 69,107 69,107 Interest expense (30,985) (30,985) Non-cash financing cost associated with convertible preferred stock (864,000) (864,000) ----------------------------- ----------- Loss before provision for income taxes (1,176,901) (153,960) (2,016,061) Provision for income taxes 800 3,800 4,600 ----------------------------- ----------- Loss from continuing operations $(1,177,701) $ (157,760) (2,020,661) ============================= =========== Loss per share information (2): Basic and diluted loss per share from continuing operations $ (0.27) $ (0.19) =========== =========== Weighted average number of shares of common stock, basic and diluted 5,736,544 12,672,527 =========== ===========
2 PRO FORMA CONDENSED STATEMENT OF OPERATIONS (Unaudited) Three Months Ended March 31, 1999 ---------------------------------
The Company MCIF(4) Pro Forma Pro Forma (Formerly, Adjustments Combined HealthDesk Corporation)(3) ----------------------------------------------------- Revenues $ 711,477 $1,256,673 $ 1,968,150 Direct Expenses 450,779 786,215 1,236,994 ------------------------ ----------- Gross Profit 260,698 470,458 731,156 Operating Expenses Selling, General & Administrative (308,595) (526,235) (834,830) Amortization of Goodwill (57,100) 114,200 (171,300)(1) Other income (expense): Non-cash financing cost associated with convertible preferred stock (367,500) (367,500) ------------------------ ----------- Loss before provision for income taxes (472,497) (55,777) (642,474) Provision for income taxes 600 - 600 ------------------------ ----------- Loss from continuing operations $ (473,097) $ (55,777) (643,074) ======================== =========== Loss per share information (2): Basic and diluted loss per share from continuing operations $ (0.05) $ (0.04) ========== =========== Weighted average number of shares of common stock, basic and diluted 8,840,475 14,378,075 ========== ===========
(1) Goodwill is estimated to have a useful life of ten years and is amortized using the straight-line method. The Pro Forma Condensed Statements of Operations for the year ended December 31, 1998 and the three months ended March 31, 1999, reflect twelve and three months amortization for those periods, respectively. (2) Pro forma loss per share from continuing operations is based on the weighted average number of shares of common stock outstanding during the periods after giving pro forma effect to the issuance of common stock to MCIF in connection with the merger as of the beginning of the respective periods and the assumed conversion of preferred stock to common stock immediately upon the issuance of the preferred stock. Options and warrants to purchase common stock were excluded in the calculation of the pro forma loss per share, as their effect would be antidilutive. (3) Includes the results of operations for MCIF from March 2, 1999 through March 31, 1999. (4) Includes the results of operations for MCIF from January 1, 1999 through March 1, 1999. 3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. MC Informatics, Inc. May 17, 1999 By: /s/ JEFFERY L. POLLARD ----------------------- Jeffrey L. Pollard Chief Financial Officer 5 MC Informatics, Inc. Index to Financial Statements Year Ended December 31, 1998 and for the Period from April 14, 1997 (Inception) to December 31, 1997 Report of Independent Certified Public Accountants (BDO Seidman, LLP) F-2 Report of Independent Certified Public Accountants (Schubert & Company) F-3 Balance Sheets F-4 Statements of Operations F-5 Statements of Stockholders' and Members' Deficit F-6 Statements of Cash Flows F-7 Notes to Financial Statements F-9 F-1 Report of Independent Certified Public Accountants Board of Directors MC Informatics, Inc. Irvine, California We have audited the accompanying balance sheet of MC Informatics, Inc. (formerly MC Informatics, LLC) as of December 31, 1998, and the related statements of operations, stockholders' and members' deficit and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of MC Informatics, Inc. at December 31, 1998, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles. /s/ BDO Seidman, LLP - ------------------------------ BDO Seidman, LLP Orange County, California May 5, 1999 F-2 Report of Independent Certified Public Accountant To the Members MC Informatics, LLC Fountain Valley, California I have audited the accompanying balance sheet of MC Informatics, LLC, a California limited liability company, as of December 31, 1997, and the related statements of operations, members' deficit and cash flows for the period from April 14, 1997, inception, through December 31, 1997. These financial statements are the responsibility of the Company's management. My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with generally accepted auditing standards. Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audit provides a reasonable basis for my opinion. In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of MC Informatics, LLC as of December 31, 1997, and the results of its operations and its cash flows for the period from April 14, 1997, inception, through December 31, 1997 in conformity with generally accepted accounting principles. /s/ ALLAN C. SCHUBERT - -------------------------- Allan C. Schubert Orange County, California July 21, 1998 F-3 MC Informatics Inc. Balance Sheets December 31, 1998 and 1997 ________________________________________________________________________________
1998 1997 - ------------------------------------------------------------------------------- Assets Current assets: Cash $ 17,730 $ - Accounts receivable, net of allowance for doubtful accounts of $38,597 in 1998 966,786 116,504 Prepaid expenses and other current assets 61,033 3,772 - ------------------------------------------------------------------------------- Total current assets 1,045,549 120,276 Property and equipment, net of accumulated depreciation of $2,657 in 1998 and $108 in 1997 17,261 892 Other assets, net of accumulated amortization of $10,944 in 1998 and $3,994 in 1997 24,424 18,006 - ------------------------------------------------------------------------------- $1,087,234 $139,174 =============================================================================== Liabilities and Stockholders' Equity Current liabilities: Current portion of notes payable to related $ 773,819 $ - parties (Note 2) Notes payable (Note 3) 12,500 40,000 Accounts payable 222,556 73,643 Accrued compensation 126,544 74,054 Customer deposits 70,000 - Deferred revenue 52,824 - Other accrued expenses 64,140 3,866 - ------------------------------------------------------------------------------- Total current liabilities 1,322,383 191,563 Notes payable to related parties, net of current portion (Note 2) 15,000 40,000 - ------------------------------------------------------------------------------- Total liabilities 1,337,383 231,563 - ------------------------------------------------------------------------------- Commitments and Contingencies (Notes 4 and 6) Subsequent Events (Note 7) Members' deficit - (92,389) Stockholders' deficit: Common stock, no par value; 1,374,356 shares authorized; 1,000,000 shares issued and outstanding 70,000 - Accumulated deficit (320,149) - - ------------------------------------------------------------------------------- Total stockholders' and members' deficit (250,149) (92,389) - ------------------------------------------------------------------------------- $1,087,234 $139,174 ===============================================================================
See accompanying notes to financial statements. F-4 MC Informatics, Inc. Statements of Operations Year Ended December 31, 1998 and For the Period from April 14, 1997 (Inception) to December 31, 1997 ________________________________________________________________________________
1998 1997 - -------------------------------------------------------------------------------- Revenues (Note 1) $3,716,585 $ 681,332 Direct expenses 2,529,959 261,618 - -------------------------------------------------------------------------------- Gross profit 1,186,626 419,714 General and administrative expenses 1,309,601 580,506 - -------------------------------------------------------------------------------- Loss from operations (122,975) (160,792) Interest expense (30,985) (1,597) - -------------------------------------------------------------------------------- Loss before income taxes (153,960) (162,389) Provision for income taxes 3,800 - - -------------------------------------------------------------------------------- Net loss $ (157,760) $(162,389) ================================================================================
See accompanying notes to financial statements. F-5 MC Informatics, Inc. Statements of Stockholders' and Members' Deficit ________________________________________________________________________________
Members' Equity (Deficit) Common Stock --------------- -------------------- Accumulated Amount Shares Amount Deficit Total - ---------------------------------------------------------------------------------------------------------------------- Balance, April 14, 1997 (Inception) $ - - $ - $ - $ - Members' capital contributions 70,000 - - - 70,000 Net loss (162,389) - - - (162,389) - ---------------------------------------------------------------------------------------------------------------------- Balance, December 31, 1997 (92,389) - - - (92,389) Net income, January 1 through June 22, 1998 72,189(1) - - - 72,189 Conversion of LLC to S-corporation 20,200 1,000,000 70,000 (90,200) - Net loss, June 23 through December 31, 1998 - - - (229,949)(1) (229,949) - ---------------------------------------------------------------------------------------------------------------------- Balance, December 31, 1998 $ - 1,000,000 $70,000 $(320,149) $(250,149) ======================================================================================================================
(1) The total net loss for the year ended December 31, 1998 was $157,760. See accompanying notes to financial statements. F-6 MC Informatics, Inc. Statements of Cash Flows Year Ended December 31, 1998 and For the Period From April 14, 1997 (Inception) to December 31, 1997 ________________________________________________________________________________
1998 1997 - -------------------------------------------------------------------------------- Cash flows from operating activities: Net loss $(157,760) $(162,389) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 9,499 4,102 Provision for doubtful accounts 38,597 - Changes in assets and liabilities: Accounts receivable (888,879) (116,504) Prepaid and other current assets (57,261) (3,772) Other assets (13,368) - Accounts payable 148,913 73,643 Accrued compensation 52,490 74,054 Customer deposits 70,000 - Deferred revenue 52,824 - Other accrued expenses 60,274 3,866 - -------------------------------------------------------------------------------- Net cash used in operating activities (684,671) (127,000) - -------------------------------------------------------------------------------- Cash flows from investing activities: Purchase of property and equipment (18,918) (1,000) Purchase of intangible assets - (22,000) - -------------------------------------------------------------------------------- Net cash used in investing activities (18,918) (23,000) - -------------------------------------------------------------------------------- Cash flows from financing activities: Proceeds from notes payable to related party 848,819 40,000 Repayments of notes payable to related party (100,000) - Proceeds from notes payable 50,000 40,000 Repayment of notes payable (77,500) - Members' capital contributions - 70,000 - -------------------------------------------------------------------------------- Net cash provided by financing activities 721,319 150,000 - --------------------------------------------------------------------------------
F-7 MC Informatics, Inc. Statements of Cash Flows (Continued) Year Ended December 31, 1998 and For the Period From April 14, 1997 (Inception) to December 31, 1997 ________________________________________________________________________________
1998 1997 - -------------------------------------------------------------------------------- Net increase in cash 17,730 - Cash, beginning of period - - - -------------------------------------------------------------------------------- Cash, end of period $ 17,730 $ - ================================================================================ Supplemental disclosures of cash flow information: Cash paid during the period for: Interest $ 15,893 $ 31 Income taxes $ 1,920 $ - ================================================================================
See accompanying notes to financial statements. F-8 MC Informatics, Inc. Notes to Financial Statements ________________________________________________________________________________ 1. Summary of Business and Organization Significant Accounting MC Informatics, Inc. (the "Company") was incorporated in Policies California on June 22, 1998. The Company is the successor to a California limited liability company formed on April 14, 1997. The Company provides management and technical services to the healthcare information industry, specializing in facility management, outsourcing, and system integration and consulting. Effective June 22, 1998, the members of the limited liability company converted their membership interest to shares of the Company's common stock. Revenue Recognition The Company recognizes revenue when services are rendered. Payments received from customers in advance of services have been deferred until earned and recorded as deferred revenue in the accompanying financial statements. Property and Equipment Property and equipment are recorded at cost. The Company provides for depreciation of property and equipment utilizing the straight-line method over their estimated useful lives of up to seven years. Intangible Assets Intangible assets are carried at cost less accumulated amortization which is calculated on a straight-line basis over their estimated useful lives of up to five years. F-9 MC Informatics, Inc. Notes to Financial Statements ________________________________________________________________________________ 1. Summary of Long Lived Assets Significant Accounting The Company reviews the carrying amount of its long-lived Policies assets and identifiable intangible assets for possible (Continued) impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of their carrying amount or fair value less costs to sell. Income Taxes Commencing June 22, 1998 upon the Company's conversion from a limited liability company ("LLC") to an S-corporation under the provisions of Section 1362 of the Internal Revenue Code, the Company has elected to be taxed as an S-corporation. Accordingly, the Company has not provided for any income taxes, except certain state franchise taxes, since the liability is that of the individual stockholders. Upon conversion to an S-corporation, income taxes are accounted for using the asset and liability method. This method generally provides that deferred tax assets and liabilities be recognized for temporary differences between the financial reporting basis and the tax basis of the Company's assets and liabilities. A valuation allowance is required to reduce the potential deferred tax asset when it is more likely than not that all or some portion of the potential deferred tax asset will not be realized. The impact on deferred taxes of changes in tax rates and laws, if any, are applied to the years during which temporary differences are expected to be settled and reflected in the financial statements in the period of enactment. Deferred income taxes are insignificant to the accompanying financial statements. F-10 MC Informatics, Inc. Notes to Financial Statements ________________________________________________________________________________ 1. Summary of Prior to the Company's conversion to an S-corporation from Significant an LLC, no liability for income taxes was recorded for Accounting Federal or state purposes since the LLC was recognized as a Policies partnership for income tax purposes. Accordingly, all (Continued) profits, losses and credits of the Company through June 22, 1998 were the responsibility of the LLC members and were recognized on their respective income tax returns. Concentration of Credit Risk Credit is extended for all customers based upon an evaluation of the customer's financial condition and credit history and generally the Company does not require collateral. Credit losses are provided for in the financial statements and consistently have been within management's expectations. The Company had revenues from two customers which accounted for approximately 39% and 18%, respectively, of revenues for the year ended December 31, 1998. The accounts receivable balance from these customers aggregated approximately $566,000 at December 31, 1998. The Company had revenues from four customers which accounted for 26%, 22%, 16% and 15%, respectively, of revenues for the period from April 14, 1997 (inception) through December 31, 1997. The accounts receivable from these customers aggregated approximately $68,500 at December 31, 1997. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. F-11 MC Informatics, Inc. Notes to Financial Statements ________________________________________________________________________________ 1. Summary of Reclassifications Significant Accounting Certain reclassifications have been made to the prior year Policies financial statements to be consistent with the 1998 (Continued) presentation. 2. Notes Payable Notes payable to related parties consist of the following: to Related Parties 1998 1997 ------------------------------------------------------------ Unsecured notes payable to director and officer; bearing interest at 10%; principal and interest due on various dates through July 2002. $ 77,000 $ 40,000 Unsecured notes payable to certain directors and officers; bearing interest at 8.5%; payable on demand, and if no demand is made, then principal and interest is due on various dates through December 1999. 711,819 - ------------------------------------------------------------ 788,819 40,000 Current portion 773,819 - ------------------------------------------------------------ $ 15,000 $ 40,000 ============================================================ Future minimum debt maturities of notes payable to related parties are $773,819 in 1999 and $15,000 in 2002. Interest incurred on notes payable to related parties was $30,385 and $833 during the year ended December 31, 1998 and the period from April 14, 1997 (inception) to December 31, 1997, respectively. F-12 MC Informatics, Inc. Notes to Financial Statements ________________________________________________________________________________ 3. Notes In July 1998, the Company borrowed $50,000 from an Payable individual. The unsecured note payable bore interest at 10%. The outstanding balance at December 31, 1998 was repaid in January 1999. In October 1997, the Company borrowed $40,000 from an individual. The unsecured note payable bore interest at 10% and was repaid during 1998. 4. Commitments The Company leases its office facilities under an operating lease, on a month-to-month basis. Rental expense amounted to approximately $16,000 for the year ended December 31, 1998 and $4,500 for the period from April 14, 1997 (inception) through December 31, 1997. 5. Profit The Company established a profit sharing plan on September Sharing 1, 1997, which is qualified under Section 401(k) of the Plan Internal Revenue Code. Any employee who has attained the age 21 and has completed three months of service is eligible to participate. Employees may contribute to the plan subject to the limits of Section 401(k) of the Internal Revenue Code. The Company may contribute to the profit sharing on behalf of the employees at the Company's discretion. There were no Company contributions to the plan during 1998 and 1997. 6. Year 2000 Like other companies, the Company could be adversely (Unaudited) affected if its computer systems or the systems of its suppliers or customers do not properly process and calculate date-related information and data from the period surrounding and including January 1, 2000. This is commonly known as the "Year 2000" issue. Additionally, this issue could impact non-computer systems and devices such as production equipment, elevators, etc. At this time, because of the complexities involved in the issue, management cannot provide assurances that the Year 2000 issue will not have an impact on the Company's operations. F-13 MC Informatics, Inc. Notes to Financial Statements ________________________________________________________________________________ 7. Subsequent Stock Option Plan Events In February 1999, the Company adopted the 1999 Stock Option Plan (the "Plan") under which eligible employees can receive options to purchase shares of the Company's common stock at a price generally not less than 100% of the fair value of the common stock on the date of the grant. The Plan allows for the issuance of a maximum of 374,356 shares of the Company's common stock. The options granted under the Plan are exercisable over a maximum term of ten years from the date of grant. In February 1999, the Company granted options to purchase 354,724 shares of common stock at $1 per share, which is at a discount to the market. The options vest over five years. Merger On March 2, 1999, the Company was merged with and into a wholly-owned subsidiary of HealthDesk Corporation ("HealthDesk") through the exchange of all the outstanding shares of the Company's common stock for 5,645,230 shares of common stock of HealthDesk, pursuant to an agreement dated August 18, 1998. The merger is intended to qualify as a reorganization under Section 368(a) of the Internal Revenue Code. The continuing operations of the combined entity will be substantially that of the Company. In connection with the merger, HealthDesk changed its name to MC Informatics, Inc. F-14 -----END PRIVACY-ENHANCED MESSAGE-----